Late last week, Nokia dropped what many consider to be a bomb on the WebM project: a list of patents that VP8 supposedly infringes in the form of an IETF IPR declaration. The list has made the rounds around the web, often reported as proof that VP8 infringes upon Nokia's patents. All this stuff rang a bell. Haven't we been here before? Yup, we have, with another open source codec called Opus. Qualcomm and Huawei made the same claims as Nokia did, but they turned out to be complete bogus. As it turns out, this is standard practice in the dirty business of the patent licensing industry.

First, let's talk about Nokia's patents. As we've discussed before, VP8 has been proposed as a possible codec for WebRTC, a W3C API definition to enable browser-to-browser voice calling, video chat, and file sharing without the need for any plugins. If browsers supported this, we'd no longer need separate, often closed tools like Skype and FaceTime - in other words, a major step forward for everybody but those running said closed tools.

As part of the process of defining the standard, the Internet Engineering Task Force wants to find out if any proposed technologies are problematic on the intellectual property front, which is a very wise thing to do in today's litigious environment. This is partly why Google decided to essentially put the MPEG-LA offside (without actually admitting infringement), so that the largest producer of 'fear, uncertainty, and doubt' around VP8 no longer plays a role.

Sadly, just as everything seemed to be cleared up around VP8, out of the blue comes Nokia, which has made an intellectual property rights declaration to the IETF. They dumped a seemingly long and scary list of patents that they claim VP8 infringes upon. They also stated that they are unwilling to license the patents on a royalty-free or FRAND basis, and gave the following statement to Florian Mueller, a consultant paid by Oracle and Microsoft:

Nokia believes that open and collaborative efforts for standardization are in the best interests of consumers, innovators and the industry as a whole. We are now witnessing one company attempting to force the adoption of its proprietary technology, which offers no advantages over existing, widely deployed standards such as H.264 and infringes Nokia's intellectual property. As a result, we have taken the unusual step of declaring to the Internet Engineering Task Force that we are not prepared to license any Nokia patents which may be needed to implement its RFC6386 specification for VP8, or for derivative codecs.

But how unusual is this step, really? I distinctly remembered something like this happening before, and after a short bit of digging, it turns out I wasn't going crazy. In fact, the mandatory-to-implement audio codec selected for WebRTC - Opus - faced the exact same challenges; except for Opus, they came from Qualcomm and Huawei.

Opus is an audio codec developed mostly by Mozilla and the Xiph.org Foundation, with contributions form Skype and Broadcom, as detailed over at Ars. Patents covering Opus are owned by Broadcom, the Xiph.org Foundation itself, and Skype/Microsoft; however, all of these organisations have committed to making these patents available for royalty-free use.

Two other companies, Qualcomm and Huawei, were not so keen on Opus. The companies claimed they owned patents that Opus infringes, and made similar intellectual property rights declarations to the IETF as Nokia has just done (Qualcomm's, Huawei's). Like Nokia, and unlike Microsoft/Skype and Broadcom, Qualcomm and Huawei were unwilling to license these patents royalty-free. The end for Opus, right?

Well, no, not really. The Xiph.org Foundation decided to investigate Qualcomm's/Huawei's patent claims, and after a lot of legal legwork, they came to the conclusion that the claims were complete and utter bogus - as detailed by LWN. While the Xiph.org Foundation first considered the harsh option of a declaratory judgment, they instead decided to just document why the claims were invalid. In fact, they went so far as to employ an external counsel to review the patent claims. The conclusion?

When it comes to patents, it is difficult to say much without making lawyers nervous. However, we can say something quite direct: external counsel Dergosits & Noah has advised us that Opus can be implemented without the need to license the patents disclosed by Qualcomm, Huawei, or France Telecom.

They won, and Opus was declared 'mandatory to implement' for WebRTC with a 'strong consensus'.

This raises a simple question: why do companies file these IPR declarations if the patents enclosed do not apply? The Xiph.org Foundation's Christopher "Monty" Montgomery explains this quite well:

We deal with this in the IETF all the time. Someone files a draft and a slew of companies file IPR statements that claim they have patents that 'may' read on the draft. Unlike other SDOs though, the IETF requires them to actually list the patent numbers so we can analyze and refute. And despite unequivocal third-party analyses stating 'there is no possibility patent X applies', these companies still present their discredited IPR statements to 'customers' and mention that these customers may be sued if they don't license. This is not the exception; this is standard operating procedure in the industry. This style of licensing, for example, accounts for more than half of Qualcomm's total corporate income.

The root of the problem is that while these intellectual property rights declarations have no legal standing, they are free and simple to make, and there's no obligation whatsoever to actually defend these statements. The press and bloggers automatically assume the declarations are valid, write their articles from said viewpoint, and thus, 'fear, uncertainty, and doubt' is born, which can then be exploited by companies such as Qualcomm.

The patent game is essentially a protection racket, [Montgomery] said, and those who are trying to do things royalty-free are messing things up for those who want to collect tolls. "The industry is pissed at Google because they won't play the protection racket game", he said. Qualcomm and others just list some patents that look like they could plausibly read on a royalty-free codec, because it doesn't cost them anything.

[...]

Companies "have figured out how to fight 'free'", Montgomery said, by making it illegal. In order to fight back through the courts, there would be an endless series of cases that would have to be won, and each of those wins would not hurt the companies at all. There is a "presumption of credibility" when a patent holder makes a claim of infringement, and the press "plays along with that", he said. But Eben Moglen has pointed out that an accusation of infringement has no legal weight, so there is no real downside to making such a claim.

Which brings us right back to Nokia. It is my firm belief that Nokia is very busy trying to make sure the world is aware of its patent portfolio. Nokia hasn't exactly been doing well lately - they only sold marginally more smartphones in Q4 2012 than in Q2 2012, despite brand new handsets and a new operating system release - and a very good way to drum up acquisition value is to emphasise the strength of its patent portfolio.

This intellectual property rights declaration has been very successful in putting the spotlight on Nokia's patent portfolio. The press the world over has reported the supposed infringement as fact, even though the declaration itself isn't even worth the bits it's written with. The fact that this has the potential to derail the creation of a fantastic advance for the open web is of no concern to Nokia. Or, maybe I should say: to an Elop-led Nokia.

As Montgomery noted, one good thing is working in our favour: the IETF requires companies to list their patents. This means that work is now underway to check Nokia's claims, or to possibly invalidate the patents in question. While the list of patents looks daunting, this is just scaremongering on Nokia's part; when broken down, the list isn't even half as scary as Nokia makes it out to be, due to lots of duplicates and continuations.

Let's hope we'll see the same thing happen to VP8 as happened to Opus: independent counsel declaring Nokia's claims invalid. The race is on, and I have a sneaking suspicion the outcome will match that of Opus'. Nokia's listed patents are all old and have been publicly available for years, so it stands to reason that On2 (and later Google) have designed around them.